(Bloomberg) — Robinhood Markets Inc . has been officially warned by regulators that it could face enforcement action related to its dealings with cryptocurrencies.
The so-called Wells notice from the US Securities and Exchange Commission concerns Robinhood Crypto and its cryptocurrency listings, cryptocurrency custody and platform operations, the company said in a regulatory filing on Monday. Agency staff told Robinhood that it took a “preliminary decision” to recommend that the SEC file an enforcement action.
The result could be an injunction, a cease-and-desist order, termination of employment and penalties or other restrictions on activities, according to the filing. The company was previously subpoenaed and has cooperated with the investigation, Robinhood said.
A coming Wells notice gives the company time to refute the agency's allegations and does not necessarily indicate an enforcement action will follow.